Axis Financial Results Points to Market Slowdown

Author: John Honovich, Published on Oct 17, 2008

Axis 3rd quarter results demonstrate signs of a market slowdown, most strongly in Europe but with leading indicators globally.

  • Worldwide video growth decreased from 37% in Q2 to 32% in Q3.
  • Europe video growth plummeted from 37% to 11%. Axis explained that, "A number of European markets have been characterized by a degree of caution and have displayed a slower growth rate for network video during the quarter."
  • US video growth slowed from 36% to 32%.
  • Axis admitted that the transition from analog to IP has been slowed by the financial crisis
  • Axis admitted that projects are being delayed.

As Axis states in their outlook for the remainder of 2008:

"The current financial turmoil has meant in some cases that decisions on security installations have been deferred, which in turn has affected the pace of the technology shift from analog to digital technology."

As the chart below demonstrates, Axis video growth (red line) has been slowing significantly since the middle of 2007 (coincidently the peak of the housing bubble?).
axis ip video growth slowing

What is the cause?
I offer two hypothesis to evaluate:
  1. The economy is pulling down the IP video market resulting in lower growth in 2009.
  2. Axis' competitive differentiation is dimishing causing its dominance in the IP camera market to decrease.
On the positive side for Axis, their Operating Margins were unchanged from Q2. Interestingly though it looks like they slashed Sales and Marketing costs by 10% to achieve this. [Note: if Axis thought that the market was going to recover quickly, it is unlikely that they would have cut sales and marketing costs so significantly]

What will happen next?
The title of their presentation is "Continued Profitable Growth". While this is definitely true, it is misleading. Growth deceleration will continue and should quicken in Q4, especially in the US where the impacts of the credit crunch are likely to start taking effect.

What's interesting now is: how will they and others respond?

Most Recent Industry Reports

Video Surveillance Manufacturers Risk Lawsuits For Botnet Attacks on Oct 24, 2016
The unprecedented scale of internet outages on October 21st from botnet attacks risk triggering lawsuits against video surveillance manufacturers,...
Mobile VMS Top Integrator Problems on Oct 24, 2016
In an IPVM survey, integrators report 4 problems most consistently with using mobile VMS applications: Network setup / cybersecurity...
Chinese Company Xiongmai Threatens Legal Action Against Western Accusers on Oct 24, 2016
The Chinese video surveillance manufacturer, Xiongmai, whose equipment numerous sources blame for driving massive Internet attacks over the past...
Security Consultants Speak Episode 1 - Protus3 on Oct 21, 2016
This is a first of a series of conversations with security consultants. If you are a security consultant that wants to talk and can share frank...
Sony and Samsung Breaking VBR on Oct 21, 2016
For years, users have known variable bitrate (VBR) as one thing only: bandwidth varies, compression stays the same. This is not an accident but an...
Pelco Matrix End Of Life - End Of An Era on Oct 20, 2016
Pelco Matrix switchers, once the pinnacle of large SD analog installations, are now literally impossible to build. The Matrix products were not...
Axis Video Revenue Down on Oct 20, 2016
An important milestone. Axis revenue for video products is down year over year. But Axis is now focusing on 'diversification'. In this report, we...
Worst Access Control 2016 on Oct 19, 2016
Two access control providers stood out as being the worst to work with for integrators. In this report, we analyze the answers to: "In the past...
Hacked DVRs Surge To 400,000 on Oct 19, 2016
The global internet is under attack from record breaking botnets. And it is getting worse, Mirai doubled in size in the last month. Shamefully,...

The world's leading video surveillance information source, IPVM provides the best reporting, testing and training for 10,000+ members globally. Dedicated to independent and objective information, we uniquely refuse any and all advertisements, sponsorship and consulting from manufacturers.

About | FAQ | Contact